Construction Industry Federation in warning over rising insurance costs
The Construction Industry Federation (CIF) has warned that spiralling insurance premiums are adding to construction costs.
Over the past 12 months Employer Liability/Public Liability (EL/PL) premiums have risen by up to 50pc in some incidences, a spokesperson for the CIF said.
The increases are being described as “unsustainable and unjust” and in particular rising claims settlements are being cited a major factor in the increasing premium costs.
“While companies expect premiums to increase as their turnover grows, the experience on the ground is that these increases are have grown disproportionately,” Dermot Carey, director of safety and training with CIF, said.
According to a report from Insurance Ireland earlier this year, insurance fraud costs Irish businesses up to €200m a year, with rapidly rising premiums cited as a direct result of court awards for injuries.
The increasing premiums has lead to a number of insurance experts suggesting that if insurance premiums continue to rise within the construction sector, many companies will no longer be able to afford cover.
In 2016, the number of Public Liability claims increased by 3.1pc while the number of Employer Liability claims increased by 8.2pc.
The CIF has warned that the continuing increase in construction costs may impact on housebuilding activity or in the reduction in value for money in the delivery of infrastructure.
“The value of claims needs to be addressed and brought in line with European norms and the Injuries Board needs to be given more powers to be more effective in dealing with claims,” Mr Carey said.
He continued to say that if claimants do not do not meaningfully engage with the process, their claim should be invalidated.
The CIF said that it welcomes the establishment Cost of Insurance Working Group and the resulting report issued in January on motor insurance. The federation said that many of the recommendations airing from this report will transfer to the EL/PL scenario.
“There is an urgent need to deal with the EL/PL insurance regime that is impacting on all employers and we trust their recommendations will be implemented without delay. We urgently need to see a stable insurance market that delivers fairer premiums for consumers,” the CIF said.